Sorry Winners

Bidders who receive both "common-value'' and "private-value'' signals about the value of an auction prize cannot fully infer their opponents' information from the bidding, so may overestimate the value of the prize and, subsequently, regret winning. With multiple objects, prices in later auctions provide information relevant to earlier ones, and sequential auctions appear more vulnerable to overpayment and inefficiency than simultaneous auctions. However, aggregating across all auctions in a simple model, winners still earn positive profit ex-post. With information inequality among bidders, the seller's revenue is influenced by two competing effects. On the one hand, simultaneous auctions reduce the winner's curse of less informed bidders and allow them to bid more aggressively. On the other hand, sequential auctions induce less informed bidders to bid more aggressively in early auctions to acquire information.